Jordan Epstein Toronto Real Estate

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Real Estate Investing

Buying an Investment Property

In today's times of low interest rates, buying real estate is becoming a very appealing option as an investment strategy. If it's done right, investing in real estate can benefit you financially in a number of ways…the property's value can appreciate over your initial purchase price, the property can generate a positive income stream in excess of your expenses, and your equity can increase as today's affordable payments are applied against your mortgage loan.

There are two primary strategies you can employ when considering an investment property. You can choose to live in a part of the property yourself, while renting out another flat or apartment in the same building. Another option would be to buy a separate unit, based solely on its investment potential. This can be a very worthwhile venture, but it has tax implications. In Canada, only the profit made buying or selling your principal residence is non-taxable. Secondary properties are normally subject to tax for any gain in price, although expenses to get the house ready for sale are often deductible. Whether it's your principal residence or not, rental income less some operating expenses is normally taxable. The first step in your planning should be to thoroughly investigate and understand the income and taxation implications of each strategy.

Once you've decided your strategy, it's time to start planning on the return you want on your investment. Your Coldwell Banker real estate professional can help you "crunch the numbers" by advising you how much you can afford to pay, offering mortgage financing options, counseling you on what range of payments the rental market will bear, estimating operating expenses, and much more.

Once you know what you can afford, it's time to start looking. You've heard the old saying that the three most important things when buying a home are: location, location, location…and this is even truer when choosing an investment property. Not only are you looking for a home that will appreciate in value, you also want a home that will be appealing to renters for an extended period of time. That means you want a location that's handy to public transit routes, and is easily accessible to major amenities. Your Coldwell Banker real estate professional can help you identify neighbourhoods with good investment property potential.

Make sure that your real estate professional clearly understands your intention to rent out a portion of the home. Many homes for sale will advertise that they have an in-law apartment, or granny flat. This usually means that the space functions as a separate unit, but the property is not zoned to use it as a legal income apartment. You can rely on your Coldwell Banker real estate professional to advise you on zoning, and safety requirements before you make that offer.

For more information please feel free to contact me anytime via email at or by contating me using the contact information on my website

Published Wednesday, January 10, 2007 10:41 AM by Jordan Epstein


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